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Twilio plans to lay off 11% of its workforce

Yahoo Finance Live looks at tech company Twilio's stock amid headlines of recent layoffs.

Video Transcript

[AUDIO LOGO]

SEANA SMITH: All right, my pick today is Twilio. Now, the tech company laying off 11% of its workforce as it focuses on profitability. CEO Jeff Lawson writing in a letter to employees that Twilio grew, quote, "too fast and that being profitable will make us stronger." Now, research, sales strategy, and administrative staff will be most effective from this restructuring effort. Twilio has underperformed many of its peers this year. Shares are down about 38% in the past six months, down 70% since January.

And, Dave, it's a tough road ahead for Twilio. Obviously, the market taking the fact that the company is cutting costs here as good news. That's a big reason why we're seeing shares pop pretty significantly here, with just about a half hour to go in the trading day. But it's still going to be a rocky road for Twilio and some of its competitors as they do try to navigate this new normal post-pandemic.

DAVE BRIGGS: Yeah, it's also a tough act to follow with them. I mean, 40% sales growth in the prior quarter, that was their slowest rate since 2017. But we're seeing this all across the sector. We see Shopify, we've seen Snap, both over higher during the pandemic. And when it comes to Twilio, they almost doubled their headcount during the pandemic, betting that demand would continue throughout after. And we've just seen this across the sector that it just hasn't kept up. So it doesn't look like they had a whole lot of choice. We'll see if this evens things out for them.